No payment from Etisalat yet despite property transfers

ISLAMABAD - Pakistan has yet to receive any green signal from Etisalat regarding payment of outstanding dues worth $800 million despite the fact Islamabad has almost resolved the long-lasting dispute by transferring 94 properties in Etisalat’s favour out of 131 properties.The government of Pakistan has transferred 94 properties to Etisalat, the buyer of 26% shares in Pakistan Telecommunication Company (PTCL), which withheld over $800 million outstanding payments. However, the UAE firm has not given any positive indication for releasing single penny out of outstanding $800 million.“Yes, Etisalat did not agree to disburse substantial amount out of pending 800 million dollars. Pakistan has asked them to release 75 per cent ($600 million) of the due amount, as it will transfer 98 properties in their favour”, said Minister of State for Privatisation Mohammad Zubair while talking to The Nation.He informed that government has transferred 94 properties by the end of March 2014 and further four would be transferred in next three to four days. An Etisalat consortium bought 26 per cent stake in PTCL for $2.6 billion in 2005 that also gave Etisalat majority-voting rights. However, Islamabad did not get its due amount worth of $800 million despite passing nine years of privatization deal between Pakistan and Etisalat. The UAE firm paid an initial $1.80 billion as per the deal terms, which also included transferring ownership of the properties to PTCL from the government. Etisalat was to pay the remaining $800 million it owed in six twice-yearly installments of $133 million, but has withheld payment as the transfer of some of these properties stalled. At the time of privatisation of PTCL, there were a total of 3,248 properties to be mutated in favour of PTCL. Of these, 3117 have been transferred till date, leaving 131 outstanding properties, which include 32 public and 99 private. However, the incumbent government had expedited the process of transferring properties to Etisalat after assuming the charge, which is main reason behind non-disbursement of $800 million. The government had decided to transfer 98 properties out of 131 in favour of Etisalat by the end of last month (March). However, Islamabad failed to get desire results. The government has estimated to generate billions of dollars from different sources in last quarter (April-June) of FY2014, including $800 million from Etisalat, minimum $1.6 billion from auction of telecom licenses and auction of Eurobond worth of $500 million. These amounts, if materialized, would help government in building its foreign exchange reserves.